HK20: We pay a price for China’s increasing prosperity – and the increasing fear of its leaders

The Hong Kong government is organizing a wide range of events to mark the 20th anniversary of the July 1, 1997 handover from the UK to China. The public response is more one of apathy than celebration. It is difficult to inspire spontaneous joy over ‘reunification’ with a Communist dictatorship.

Still, a visitor returning for the first time in 20 years would not get the impression that the handover has been a failure.

File photo: Tom Grundy/HKFP.

Many things have not changed. As in mid-97, Hong Kong is going through a property bubble causing widespread resentment about housing. As in the late 1990s, the economy rides on a booming China, but a few family-run cartels capture much of the wealth, and serious poverty exists alongside the prosperity. As 20 years ago, there is cynicism about governance and lack of progress on solving basic social, planning and environmental issues.

If our visitor asked residents about life since 1997, he would certainly hear complaints.

Many Hongkongers would tell him that the city has become ever-more crowded and expensive to live in as increased tourism and immigration from the mainland has increased competition for space and services. Economic inequality has risen, partly because of an aging population and the arrival of poor mainlanders, but also because of official land and spending policies that benefit well-connected interests.

Our visitor might think about housing markets in Vancouver and Sydney, or the populist backlashes behind Brexit and Trump, and wonder if Hong Kong is any different from the rest of the over-leveraged, post-globalization, late-capitalist world.

Some idealistic Hongkongers would also tell him that the Chinese government has broken its earlier promises of democracy. They would say that Beijing is responding to growing opposition by restricting local autonomy supposedly guaranteed by the ‘One Country Two Systems’ formula. And they would warn that China is eroding rule of law, civil rights, freedom of the press and other local core values alien to the Communist dictatorship.

An activist lies below a flag with the word ‘democracy’ written on it during Occupy Central. File photo: Tom Grundy/HKFP.

These idealists would also express bewilderment that the rest of the world doesn’t care. And sure enough, our visitor – noting the absence of overt censorship and political prisoners – would wonder what the fuss was about as he walked away.

It’s not about Hong Kong

To many people who live and work here, the post-1997 experience is about Hong Kong and little else: what China is doing to Hong Kong, and how Hong Kong is responding.

But it is not really about Hong Kong. (Nor, as Beijing’s apologists claim, is it about the mainland ‘overtaking’ or ‘sidelining’ Hong Kong.)

It is about China becoming more powerful worldwide while the Communist Party elite becomes increasingly insecure and fearful. To the leaders in Beijing, Hong Kong is one item on a list of challenges and threats they must face – along with Tibet, Xinjiang, evicted farmers, Shanghai homebuyers, Taiwan, religions, the media, the Internet, education, the debt-laden financial system, venal tycoons, outsize corporations and hostile foreign forces.

A decisive shift has taken place since Xi Jinping took power in Beijing five years ago (and CY Leung became Chief Executive in Hong Kong). Xi sensed that corruption, factionalism, reformist loosening and the rise of new social and economic power centres threatened Communist Party rule. He has increased centralization, purged opponents and tightened control of politics, the economy, the media, education, religion and much else.

This should not be surprising. China had become the world’s swing producer of consumer goods, the driver of global commodity markets and a major exporter of capital. It had built up huge corporate entities, a rapacious crony-capitalist elite, regional administrative fiefdoms, a thriving urbanized middle class, sophisticated on-line retailing and social media, and even burgeoning NGOs and other movements.

From Xi’s point of view, such growth in scale, complexity and freedom was getting to a point where it could not be controlled – and that meant the end of the Party’s monopoly of power.

Hong Kong is just one part of a nation whose rulers fear a slide towards chaos.

Our destiny is integration

If China’s leaders see Western-style limited government as a threat to their oligarchy, it follows that they see Hong Kong’s rules-based system and pluralism as incompatible with their own regime. The old comforting idea that China would learn from Hong Kong must therefore be turned on its head.

It is now obvious that Beijing will not – cannot – allow Hong Kong people to choose their own government. We are already seeing Beijing further rig the city’s elections, for example by disqualifying opposition candidates.

The already weak legislature will become more of a rubber stamp. The executive branch will increasingly take orders from Beijing officials even on domestic matters like education. All these trends are currently in train. Pro-democracy activists protest, but are helpless.

Hong Kong’s rule of law is regarded as the core of its success as a business centre and free society. However, since 1997, Beijing has had the right to overturn Hong Kong courts’ decisions by ‘interpreting’ the city’s Basic Law.

The Chinese government has since established a precedent (on oath-taking) for using this process to pre-empt judgements. Beijing’s longstanding rejection of ‘separation of powers’ inevitably applies to judicial independence in Hong Kong. Chinese officials are especially wary of Hong Kong’s foreign judges.

Hongkongers march in protest of the Basic Law interpretation in November 2016. Photo: Tom Grundy/HKFP.

Beijing, via the local administration, is eroding rule of law and politicizing law enforcement and prosecutions in its fight against ‘pro-independence’ elements. It is clear from two separate cases that China’s leaders are in practice free to send covert security agents into Hong Kong to abduct perceived enemies.

The broadly pro-establishment business community assures itself that Beijing has no interest in undermining commercial contract enforcement and property rights in Hong Kong (where China’s elites launder much wealth). But essentially, rule of law in Hong Kong can exist only insofar as it suits the Communist Party.

Preservation of the one-party state must come before other aspects of Hong Kong’s separate way of life. Beijing-friendly proprietors now control most of the city’s mainstream media; since 2002 Hong Kong has fallen from 18th to 73rd in the World Press Freedom Index.

Beijing loyalists increasingly dominate advisory and professional bodies. Pro-democracy academics are coming under pressure, and – following growing complaints from Beijing officials – the local authorities are introducing “national education” and other patriotic influence into schools.

Beijing co-opted the local business elite back in the 1980s and 90s. But the local tycoons and multinationals are increasingly being squeezed aside as big Mainland companies become the dominant players in town – in finance, development, construction and other sectors.

This is not surprising given the rise of corporate China globally in the last 20 years and Hong Kong’s attractions as an offshore capital market and business centre – something Shanghai or Shenzhen cannot be.

Jack Ma. File Photo: Wikimedia Commons.

But most such companies are state-owned or controlled, and even those that are ostensibly private – like Jack Ma’s Alibaba, new owner of the South China Morning Post – are part of the Chinese party-state team and will ultimately put politics ahead of (say) minority shareholders or regulators.

The ordinary people of Hong Kong are also being squeezed aside in their own city. Cross-border immigration has increased significantly – more than an eighth of the population are post-handover mainland arrivals. The annual number of visitors (mostly tourists and shoppers) from the mainland has risen from around 3 million in the mid-1990s to over 40 million in recent years.

Mainlanders have increased competition for private-sector homes and school places. Mandarin is displacing Cantonese as a medium of instruction in schools.

Officially, these developments have their own separate explanations: migrants are needed to replenish the workforce, the tourists boost the economy, and the national language is a key to career success.

Seen together, they look, and feel, like a deliberate dilution of the indigenous population – Beijing’s strategy in fringe regions like Lhasa.

A Tibetan flag seen in Hong Kong. Photo: Cloud.

Impossible to crush freedom from minds

So long as the Communist Party insists on a monopoly of power in China and sees threats everywhere, Hong Kong as a jurisdiction and a community of institutions must give way.

But on a brighter note, it is hard to see how Beijing can eradicate the idea of free Hong Kong.

Beijing’s greatest mistake in Hong Kong since 1997 has been its failure to win over the more educated, and especially younger, parts of the city’s population. Indeed, it is shocking how the Communist Party has been so intolerant, belligerent and plain unlovable that it has alienated the post-1997 generation to such effect.

And, unable to imagine any other way to handle a modern pluralist society, Beijing’s response is still to increase ‘patriotic’ sloganizing and United Front intimidation.

Traditional pan-democrats who took China seriously are fading into irrelevance (Beijing chooses this time to reach out to the most moderate of them). In their place are coming all manner of on-line, alternative, cultural, environmental and other younger communities with distinct and assertive takes on Hong Kong identity.

Photo: Tom Grundy/HKFP.

As seen in the Umbrella Movement, they exploit spontaneity, creativity and satire. Some mischievously affect faux nostalgia for colonial times. Some explicitly reject Chinese-ness. Some are forming ties with counterparts in Taiwan – another place where the Chinese government has blown any chance of appealing to the young.

The more Chinese officials and their local surrogates hector their unwilling subjects and attack local institutions, the more they estrange Hong Kong’s more educated and younger population.

If anything, the result is that Hong Kong people hold their freedom and values more dearly. That awareness seems perfectly capable of lasting another 20 years – which is perhaps more than we can say for the Leninist regime in Beijing.

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